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Tuesday, February 19, 2008

I'm Not That Principled

For those of us that pay taxes and pay attention to the news, we know that the President has passed the economic stimulus bill. This means that most of us will get a check in May.

Where does this money come from, you wonder? When I heard about how much money would be paid out in total ($100+ billion), one of my first thoughts was "So where is the government going to get its operating money?" I don't buy it one bit that the government is being "nice" by giving us our money back. They are apparently not that big on being fiscally responsible...they pay for their operations by taxing us...but if they give us their operating money back, then what? So basically these rebate checks will just be driving the government further into debt.

This leads me to the point of this post. I've heard more than one article stating that the stimulus plan is a bad bad idea. Here's the litmus test to see how firm those articles' authors stand on their principles: will they cash their rebate checks? All the amateur economist bloggers out there, are you going to deposit your checks? Dave Ramsey, are you going to deposit your check?

Perhaps in some alternative universe, I would be principled enough to rip up the check. I can totally admit that I am not that principled. (After all, there are Roth IRAs to fill up) I know it's probably bad for the nation's future. I know it's bad economics, but I am going to be a bad economist, take the money, and run. But at least I can admit it.

Most of our readers have brains, and so many of you have probably had the same thought. Will you join us in our willful lack of foresight and happily deposit those checks in May? Anyone out there going to buy an HD TV like the feds want you to do? As for us, our rebates will probably go towards aforementioned Roth IRAs, and maybe one small splurge here or there.

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9 have poured out their souls in electronic text:

  • Alan

    Let's see... I'm guessing that $100+ billion, minus my check is still going to be $100+ billion. So I don't see a compelling reason not to deposit it!

    Eventually, this money will be replaced through taxes. But the taxes will be paid disproportionately by the upper income folks, including folks who don't qualify for the rebate check. So on net, it's really a redistribution of money from the high income earners to low income earners. I'm sure it won't be the last one of those we'll see.

  • Myfriendconnie@SmockityFrocks

    We will probably pay hospital bills. We owe approximately 21 million dollars and 57 cents.

    I'm just kidding.

    About the 57 cents.

  • Ron and Ginny

    I'm thinking we will blow it on a chicken coop and chickens...
    :-D

  • Thehotrod5

    LOL Connie I had to laugh at yours... As for us....going towards our wasted use of credit cards...*sigh* (so glad they are out of our lives for good now!) And to be put back for the kids Christmas.

    Angela

  • The Ramblin' Rat

    One thing I am trying to look into about this is if we have to pay it back or not when it comes time for next years taxes.

    According to our tax guy, when Bush did this after 9/11, you had to pay that money back when you filed your taxes the following year, so your refund (if you get one) will be $1,200.00 less than usual.

    Like I said, I'm looking into this to see if it's true or not.

    When we get our check in May, we will probably add it to our current tax refund and get a new roof for our house. It is greatly needed since the last wind storm blew off many of our shingles.

    Oh the joys of being a home owner!

  • CappuccinoLife

    I don't think Dave is poor enough to get the "rebate". So he doesn't have to prove his principals, kwim? Love the guy but there is no way we're not cashing that check. :p

  • Laura

    I don't think we'll be spending money on anything we wouldn't otherwise have bought. Maybe in a few years the money will get spent on a down payment for a house or on a new car. In the meantime, it'll just go into savings.

    Seems like about a quarter of the country will be doing just what we're doing. More than a third will be paying off debt, and only a quarter will be spending it. (According to an American Century Investments survey of some 1500 people.)

    See this and this.

    Oh, and I absolutely agree about the government not doing this to be nice. This is all a ploy to get us all to spend more so they'll get more taxes in the long run. ;-) I'm no economist, but it just makes sense that if you redistribute wealth from those who have plenty sitting in the bank (not being spent) to those who live on tighter funds (and can think of plenty they need or want to spend it on), you'll get more overall spending, and more of those lovely taxes.

    Oh, and, erm, it's an election year. The popular decision is definitely to sign (or better yet propose!) a bill that gives a lot of people free money.

  • Laura

    Seems like some folks are planning to be rather principled with the money after all:
    http://www.giveitaway.typepad.com/

  • Laura

    Oops, I forget blogger leaves it up to you to make links. For those of us whose cut-copy-paste fingers are tired:

    http://www.giveitaway.typepad.com/